India's Debt Market Shift: A Crucial Step Towards Viksit Bharat 2047

India's non-sovereign debt is projected to rise to 150% of GDP by 2047 to support the Viksit Bharat vision. The report by Crisil emphasizes the need for enhanced debt capital markets, regulatory reforms, and diversified investor participation to meet the massive credit demand of the rapidly growing economy.

India's non-sovereign debt is set to rise significantly, from around 84% of its GDP today to approximately 150% by 2047, as a strategic measure to achieve the government's ambitious Viksit Bharat plan of a USD 30+ trillion economy. This projection aligns with the borrowing patterns of developed nations like the US, the UK, and Japan during their economic revolutions in the early 21st century.

A recent report by rating agency Crisil highlights the challenges faced by India's banking sector in meeting the projected credit demand. With sluggish deposit growth and a high credit-deposit ratio over 82% by March 2026, the banks' capacity to finance these needs is limited. As a result, India's debt capital market, consisting of corporate bonds, municipal bonds, and other instruments, must play a major role.

Crisil's Senior Director, Miren Lodha, stressed the need for a more robust debt market with a broader range of issuers and investors and enhanced trading ecosystems to support the Viksit Bharat vision. The report revealed that as of fiscal 2026, India's debt capital market was a mere 22% of GDP, compared to a much larger 62% represented by gross bank credit. Future reforms are necessary to tap into underutilized markets, like securitization and municipal bonds, to fund key areas such as infrastructure and urban development efficiently.